The Federal Government is exploring the possibility of transforming Arik Air and Aero Contractors into national carriers, aiming to strengthen the aviation sector and improve domestic air travel.
A suggestion has been put forth by the Asset Management and Corporation of Nigeria that Arik and Aero Contractors airlines could be combined to form a national carrier.
During an interactive session with media executives in Lagos on Monday, Gbenga Alade – the Managing Director/Chief Executive Officer of AMCON – proclaimed this.
Alade states that Arik and Aero Contractor are both indebted to an extent where they may face difficulties in settling their debts.
According to him, the corporation proposed converting Arik and Aero Contractor to the former aviation minister but their idea was turned down.
The ex-leadership of AMCON proposed the notion to transform Arik and Aero into a state-owned carrier, which was not accepted by the former aviation minister. Nevertheless, we will reintroduce this idea as it remains the optimal choice.
He explained that although the special purpose vehicle (SPV) created by AMCON’s former management to convert Arik and Aero into a national carrier had been sold, it is still possible to establish another SPV.
Remember that Nigeria Air was launched by Hadi Sirika, the former Minister of Aviation, just three days before Muhammadu Buhari’s presidency ended.
Stakeholders expressed concerns about the ownership arrangement that granted Ethiopian Airlines a 49 percent equity stake in the company, following its development.
A 5 percent stake was held by the Federal Government, with a consortium of three Nigerian investors owning 46 percent.
In response to the agreement made in June of 2023, the House of Representatives requested that Nigeria Air halt its operations and labeled it as a deceitful venture.
The national carrier project was halted until an unknown date as announced by the current minister, Festus Keyamo in August 2023.
According to Keyamo, the airline is still on hold and was never actually Air Nigeria. The truth is that it simply had “Nigeria Air” painted on it as Ethiopian Airlines attempted to represent our country’s flag.
“Why not let our local plane proudly display the Nigerian flag, so that nobody can question whether it truly represents Nigeria Air?”
Air Nigeria should be entirely domestic, Nigerian-owned and geared towards maximizing benefits for the country rather than sharing 50 percent of profits with another nation.
The sale of Nigeria Air to Ethiopian Airlines has been blocked by a Federal High Court in Lagos.
After the court addressed the concerns presented in the case, it declared that Ethiopian Airlines’ acquisition of shares from Nigeria Air was null and void.
Halting the establishment of Nigeria Air, Justice Ambrose Lewis-Allagoa has ordered the Federal Government.
In a decision that favored the Registered Trustees of the Airline Operators of Nigeria, along with five other stakeholders in aviation industry, the judgment was delivered.
Alade expressed that the current situation of Arik and Aero Contractors has been causing him sleepless nights during Monday’s briefing.
Trust me, Arik is causing me restless nights as I struggle to find a solution for this complex issue.
“He stated that Arik has so much debt that they cannot pay.”
Alade went on to say, “To elaborate, there is a solution available. We have engaged with their key global creditors and one of them happens to be Afreximbank whom Arik owes approximately $52m.”
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He stated that the airline was only willing to accept $8.5 million after bargaining, instead of the entire amount of $52 million.
Nonetheless, the question remains: from where will that $8.5m be sourced? AMCON lacks personal funds to contribute. The resolution involved compromising and settling for removing certain components entirely as a definitive arrangement. Unfortunately, if those key elements are extracted, Arik would seize to function effectively thereafter.
“We refused to let you take it away. Instead, we suggested that AMCON provide a bank guarantee while we extend our efforts to get three planes flying immediately. With the grace of God, by February next year, our goal is for seven planes to be operational for Arik,” he declared.
Arik’s aircrafts were grounded by the Nigerian Airspace Management Agency as a result of a court order filed against the airline by its creditor and wealthy businessman, Arthur Eze.
Eze lodged a complaint with the court regarding his outstanding $2.5m payment from Johnson Arumemi-Ikhide, the creator of Arik Air.
According to Abdullahi Musa, the spokesperson for NAMA, the agency explained that Arik’s planes were secured as collateral due to an enforcement action by FCT High Court on July 19th of the year 2024.
Aero Contractors’ board was dissolved by AMCON in 2016, leading to the appointment of a temporary manager to oversee the company’s operations.
In a statement released by its media consultancy firm, AMCON explained that taking over management of the company was necessary to fulfill their responsibility of obtaining suitable bank assets and utilizing them in an advantageous manner.
AMCON took over Arik Air, established by Mr Arumemi Johnson, in 2017 as a result of the carrier’s management neglecting to meet its debt obligation amounting to several billion naira.
Arik’s debts owed to local banks were taken over by AMCON.
The owners of Arik were requested by the corporation last year to present a debt resolution plan that is credible, so as to recover the company from the Federal Government through submission to its bad debts manager.
The endeavors made by AMCON to recover assets.
Alade declared intentions to enlist the assistance of international asset trackers in reclaiming debts amounting to almost N5tn. The objective is to trace and recuperate offshore properties that defiant debtors have concealed, including those disguised within special purpose vehicles.
